Current account deficit widens to $21.8 bn

Mumbai, Sep 30 (IANS) India's current account deficit rose to $21.8 billion or 4.9 percent of the country's gross domestic product (GDP) in the quarter ended June, official data showed Monday.

According to the data released by the Reserve Bank of India (RBI), the current account deficit or the different between inflow and outflow of foreign currencies, increased sharply in the first quarter of the current financial year due to "rise in imports and some decline in merchandise exports".

The current account deficit was recorded at $16.9 billion or 4 percent of GDP in the corresponding quarter of last financial year.

"Excluding the increase in gold imports of $7.3 billion in the first quarter of 2013-14 over the corresponding quarter of the preceding year, CAD would work out to $14.5 billion, which translates into 3.2 percent of GDP," the RBI said in a statement.

Despite the sharp jump quarter-on-quarter, the figure is better than the market expectations.

"The CAD for the first quarter 2013-14 has surprised positively by coming in below market expectations owing to higher-than-anticipated net invisibles even as the trade deficit expectedly widened to 11.3 percent of GDP," said Bhupali Gursale, an economist at Angel Broking.

Gursale said for the whole fiscal 2013-14 the current account deficit is likely to narrow to nearly 3.8 percent of GDP from 4.8 percent recorded in 2012-13.

"The good news is that net services exports at $16.9 billion are likely to trend higher on an average in the current fiscal," said Soumya Kanti Ghosh, chief economic adviser, Economic Research Department, State Bank of India.

"Additionally, remittances from abroad in the first quarter exceeded street expectations at $16.6 billion. Going forward, we believe CAD in the second quarter of the current fiscal may be even lower than $10 billion," Ghosh said.

On the balance of payment basis, merchandise exports declined by 1.5 percent to $73.9 billion in the first quarter of the current fiscal as compared to $75 billion recorded in the corresponding quarter of the last fiscal.

In contrast, merchandise imports recorded an increase of 4.7 percent to $124.4 billion during the quarter under review, primarily led by a steep rise in gold imports in the first two months of the quarter.

While net foreign direct investment surged to $6.5 billion in the first quarter of 2013-14 from $3.8 billion in the corresponding quarter of the previous year, net portfolio investment registered a marginal outflow of $0.2 billion as compared with an outflow of $2.0 billion in Q1 of 2012-13, primarily led by the debt component of FII investment.

"Outflow of portfolio investment occurred essentially from the third week of May 2013 after the US Fed indicated the possible tapering of quantitative easing," the RBI said.

Matches

MORE TOP STORIES TODAY

Pietersen may play against Hyderabad

Pietersen may play against Hyderabad

As much as Pietersen's availability is a boost, the loss of a potent death bowler might sting Delhi badly. More »

Struggling Mumbai need batting fuel

Struggling Mumbai need batting fuel

Mumbai have explosive hitters down the order in the form of Corey Anderson and Kieron Pollard, but the lack of contributions from them has compounded their… More »

Boycotting IPL will not save cricket

Boycotting IPL will not save cricket

Boycotting the IPL as a means of protest against the grime in the game may not yield the desired results. More »

Srinivasan's ICC presence to be challenged

Srinivasan's ICC presence to be challenged

Srinivasan, who has been replaced by the court as board president, was named the BCCI's representative to the ICC last September. However, that position… More »

Brilliant Maxwell powers Punjab’s renaissance

Brilliant Maxwell powers Punjab’s renaissance

Maxwell has easily been the best player on display in the first nine days, with scores of 95, 89 and 95 helping Punjab shed their image of also-rans and… More »

Indian cricket is now dope-free

Indian cricket is now dope-free

The BCCI conducted over 200 dope tests during senior domestic tournaments in the just-ended 2013-14 season – the largest number of tests done by an ICC… More »

Bangalore lose nerve, lose game

Bangalore lose nerve, lose game

IPL 7, GAME 11—Vinay's over, Lynn's catch turns last-over finish in KKR's favour. More »

Couldn't turn down ECB offer: Farbrace

Couldn't turn down ECB offer: Farbrace

England's new assistant coach Paul Farbrace admitted that it was impossible turn down the job even though he will have mixed feelings when he faces… More »

Atapattu likely to be SL interim coach

Atapattu likely to be SL interim coach

Sri Lanka's chief selector Sanath Jayasuriya issued the strongest indication yet that Marvan Atapattu would be appointed coach for the tour of Ireland… More »

T20 is all about the little things: Balaji

T20 is all about the little things: Balaji

Balaji acknowledged Maxwell’s role in Punjab’s great start to season seven, but he insists that the efforts of other players like Virender Sehwag, among… More »

Cleaning up the game starts with fans

Cleaning up the game starts with fans

... because, as recent events reveal, the BCCI has little intention of doing it. More »

Jadeja spins out Rajasthan in close chase

Jadeja spins out Rajasthan in close chase

IPL 7, GAME 10—Chennai beat Rajasthan by 7 runs after last-over scare. More »

Is Srini group delaying BCCI meeting?

Is Srini group delaying BCCI meeting?

The group opposed to Srinivasan alleged that since BCCI secretary Sanjay Patel belongs to the president’s group, he was intentionally delaying the SGM… More »

'BCCI should have picked panel with care'

'BCCI should have picked panel with care'

Dalmiya said that it was the first time that the BCCI had been faced with a situation where the apex court had hauled up the Board and it should have acted… More »

Vithanage, Priyanjan get T20 call-ups

Vithanage, Priyanjan get T20 call-ups

Herath has been rested, while the team will be without the veteran pair of Mahela Jayawardene and Kumar Sangakkara, who retired from T20 internationals… More »

'Gambhir will strike form soon'

'Gambhir will strike form soon'

Gautam made an eight-ball duck in the opening game against Mumbai and in the second game against Delhi, he lasted only half those balls. More »

SL in 'difficult place' after Farbrace exit

SL in 'difficult place' after Farbrace exit

Sri Lanka depart for assignments in Ireland and England in two weeks, and Sanath Jayasuriya suggested Marvan Atapattu would be interim head coach for those… More »

Chandimal axed as T20 captain

Chandimal axed as T20 captain

Sri Lanka's cricket selectors on Wednesday sacked Dinesh Chandimal as Twenty20 captain and replaced him with Lasith Malinga, while Angelo Mathews was… More »

Farbrace is England's assistant coach

Farbrace is England's assistant coach

The ECB continued the restructuring of the England coaching set-up on Wednesday by announcing the appointment of Paul Farbrace as assistant coach. More »

SC asks Mudgal committee to continue

SC asks Mudgal committee to continue

Mukul Mudgal has communicated to the court his willingness to take up the investigation and has been asked to specify the terms and modalities on April… More »

Sri Lanka players resolve pay dispute

Sri Lanka players resolve pay dispute

The pay dispute between Sri Lanka Cricket and its 13 contracted players ended on Wednesday when the latter agreed to accept 10 percent of the participation… More »

Hope to be fit for next game - Pietersen

Hope to be fit for next game - Pietersen

With two heavy defeats at the hands of Bangalore and Chennai, Daredevils currently languish near the bottom of the table. More »

'SC decision could hurt BCCI's status'

'SC decision could hurt BCCI's status'

The Supreme Court prefers that the Justice Mudgal panel further investigate the IPL corruption scandal. More »

Mudgal panel drops bombshell in court

Mudgal panel drops bombshell in court

The Mukul Mudgal probe committee dropped a bombshell in the Supreme Court on Tuesday by making a sensational claim that it was forced to stop audio recording… More »